The Challenge of Mexico’s Next President: The Corruption at the Heart of Crime

Enrique Peña Nieto has issued several proposals about battling the plague of narcoterrorism. But he hasn't yet said how he will deal with the a key element of the crisis: the corrupting influence of money

Mexico’s old guard is officially the new guard again. The Institutional Revolutionary Party (PRI), which ruled Mexico for seven decades with an authoritarian hand, is back after a 12-year hiatus. But can the new face of the party — president-elect Enrique Peña Nieto — deal with a national landscape ravaged by a militarized battle against organized crime, one that has led to comparisons to the wars in Iraq and Afghanistan?

Upon election, Peña Nieto stressed that his party’s “old ways” of corruption are just that— old and mistakes that are now in the past. As for the narcotraffickers, he says he will simply not negotiate with criminals. In an essay he wrote for the New York Times and published the day after he claimed victory, he stressed that he plans to expand the federal police by 35,000 officers while consolidating sate and municipal police forces. Peña Nieto also reiterated his plan to establish a national gendarmerie, a militarized force under civilian control, to safeguard the country’s most violent regions. In an interview with PBS Newshour, Peña Nieto also said Mexico should start debating the legalization of some drugs as a way to keep profits out of the hands of organized crime, though he stressed that he is not in favor of legalizing drugs himself. Legislative action, in any case, is likely to be difficult: the Mexican Senate and Congress not only have a reputation as do-nothings, the recent election has left both bodies as divided as ever among an array of political parties.

Fighting crime is one thing. But the president-elect has not specified how he will combat corruption, the stubborn remnant of the PRI’s seven decades of authoritarian rule that is at the heart of the drug lords’ ability to operate in Mexico. “Peña Nieto is certainly not addressing how he is going to control political corruption—a huge problem in Mexico, and one of the two main pillars of crime all over the world,” says Edgardo Buscaglia, a senior law and economics scholar at Columbia University and president of the Mexico-based nonprofit Citizen Action Institute. (The other “pillar” is a dysfunctional justice system, which Mexico also has.) “Mexico has a large number of politicians used to receiving constant flows of money for their campaigns that come from any of the 22 types of economic crimes. This is not being addressed by Peña Nieto in any way.” He should — especially since the U.S. in a recent civil suit accused a high-ranking PRI member, former Tamaulipas state Governor Tomás Yarrington, of laundering drug cartel money. (Yarrington denies the charge.)

Money is at the black heart of a crisis that has seen even subsidiary activities of the drug trade monetized at alarming speed. Outgoing President Felipe Calderón’s aggressive military offensive against organized crime, which started when he took office in 2006, provoked a vicious backlash from Mexico’s proliferating criminal groups. It also led to a kind of metastasis. The crackdown drove up the cost of running drugs and forced the cartels to expand their business model to haul in more cash. The result was lucrative submarkets for kidnapping, extortion, oil theft, and immigrant smuggling.

Kidnapping rates, for example, have tripled since Calderón became president. Forty-nine people are kidnapped every day in Mexico—the highest rate in the world, according to Mexico’s Commission on Human Rights. Kidnappers of migrant workers collected $25 million during a six-month period in 2011, according to the organization, which stresses that figures can be unreliable because an estimated 75% of kidnapping cases go unreported.

With diversification, the Mexican drug cartels take in between $30 billion to $40 billion a year. Today, the Zetas, Mexico’s most violent gang, earn less than half their total revenue from drug trafficking. The brutal cartel, organized by ex-special forces commandos, derives a good deal of its profits not only from kidnapping but also from Mexico’s oil monopoly Pemex by siphoning off more than $1 billion in oil from Pemex storage tanks in the last two years.

Perhaps with an eye to stemming the flow of corrupting cash, Peña Nieto last month named general Oscar Naranjo, former head of the Colombian national police, as his top public security consultant. In Colombia, analysts credit Naranjo with helping to reform Colombia’s police and to freeze the assets of that country’s biggest drug dealers, a tactic that led to the capture of drug capos by making it more difficult for them to bribe officials and meet payments.

Naranjo is in good standing with the United States, which gave Colombia $5 billion in anti-drug aid during the 2000s and has provided helicopters and surveillance aircraft for Mexico to fight its drug wars. Washington is keen to repress the narcotraffickers who, with a massive assist from American drug consumers, have helped make the U.S. the world’s largest market for illegal drugs. Since 2006, the U.S. has funded the $1.6 billion Merida Initiative to support police and judicial reform in Mexico as well as interdiction (although critics say too little of the aid so far has gone to reform). Fixing the court system remains a faraway goal. Of every one hundred crimes in Mexico, only or two ever reach a judicial ruling because of corruption and incompetence.

But observers doubt that Mexico has the same conditons to effect a Colombian-style reduction in violence. Colombia had fallen into a severe crisis before it righted itself: three presidential candidates and more than half of its supreme court were assassinated, in addition to large numbers of top businessmen, before the political elite reached consensus and agreed to control organized crime. The measures resulted in the confiscation of $12 billion from organized crime groups in seven years and the prosecution of 32% of Colombia’s national legislature for corrupt dealings with the drug lords. “It doesn’t matter how many billions of dollars or helicopters the U.S. brings to Mexico,” says Buscaglia. “You will not solve violence in Mexico until the political elite comes to terms with the fact that they have to establish democratic controls. So far, no such political agreement exists.”